Articles Posted in Intellectual Property

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The writing is on the wall.  The future of television and media consumption is moving away from network channels and physical sales to an “On-Demand Internet” streaming model.  This trend has already begun with millennials.  Millennials, as a group, do not subscribe to cable television or purchase music. Instead, services like Netflix, Hulu, and SoundCloud provide Millennials with On-Demand access to television shows, movies, and music. Television networks and traditional media companies must adjust to this new trend. This issue recently came to a head in the Supreme Court’s decision in ABC v. Aereo. The Court’s decision, while resolving the immediate issue in the case, has caused a problem in the larger scheme of things. The decision has put a new spin on how the Court applies the Transmit Clause of the Copyright Act of 1976. If you provide digital media content through Internet streaming or access content through the cloud, then the Aereo decision could affect you.

What Was the Issue In ABC v. Aereo?

Aereo is a company that provides a small device that a user can connect to a computer for a monthly fee. The device allows the user to pick up network television broadcast signals and stream them directly to the user’s computer.  ABC and other network broadcasters sued Aereo for copyright infringement. The issue in the case was whether Aereo’s device fits under the definitions of performance and public transmission within the Transmit Clause of the Copyright Act of 1976.  The Transmit Clause describes the exclusive right to “transmit or otherwise communicate a performance . . . of the [copyrighted] work . . . to the public by means of a device or process . . .”  The Court held that Aereo did transmit ABC’s performance and that the transmission was to the public.  Therefore, Aereo infringed upon ABC’s copyrights.

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A corporation’s trade secrets are its lifeblood. Indeed, it is through this information that a company generates a profit and maintains its reputation in the industry. A trade secret includes any unique information that carries value. There are both state and federal laws which pertain to trade secrets. Unfortunately, federal laws do not provide strong protections. This has weakened U.S. companies that have fallen victim to international trade secret misappropriation.  In response, since April 2014 the U.S. Senate has been considering the Defend Trade Secrets Act to provide stronger national protection for domestic corporations.  Nonetheless, companies can take steps to establish internal protections for their trade secrets.

A. Trade Secrets Status

A corporation cannot claim a trade secret if it is publicly known information. Most importantly, it must be information that is not available to competitors. For example, the recipe for Coca Cola is a trade secret. In fact, this recipe is arguably the most expensive trade secret in the world. Coca Cola could not claim its recipe as a trade secret if it was readily available to Pepsi.  Any information that a corporation freely provides to customers, trade associations, outside parties, or the general public cannot constitute a trade secret.

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In general, both copyright and patent laws provide different levels of protection for computer software. Additionally, depending on the aspects of software that an owner wants to protect, these two areas of law will apply differently. Furthermore, securing a patent is a more rigorous process. However, a patent does provide a greater degree of protection. On the other hand, obtaining a copyright is less difficult, but it also provides a thinner veil of protection.

What Protection Does Copyright Law Provide For Computer Software?

The Copyright Act of 1976 is codified under 17 U.S.C. sections 101 et seq. Traditionally, copyright has been the common form of protection for computer software. However, copyrights only protect the expression of a work, and not its underlying idea. Copyrights have been instrumental in preventing software piracy and infringement of related works. The protection applies to software because the underlying computer code is similar to the types of writings the law protects. So, copyright holders can protect their software much like other literary works (e.g., books, scripts). Copyright protection essentially provides broad protections for software. It grants the typical copyright authority depending on the nature of the software. The courts have grouped software with other literary works and provided copyright protection accordingly. There also exist inconsistencies in court decisions applying the Copyright Act to software. This difficulty arises because the legal community often lacks the technical expertise necessary to properly classify software. For instance, where a judge cannot understand the program’s code, he or she cannot determine whether another infringing program’s code is substantially similar. It is necessary to establish substantial similarity to find copyright infringement. Therefore, the lack in technical background has led to unclear definitions as to what constitutes software copyright infringement.

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In a recent case, Petronas v. Godaddy.com, the Ninth Circuit held that “contributory cybersquatting” was not a valid theory for relief. This case addressed the issue of whether the Anti-Cybersquatting Consumer Protection Act (“ACPA”) allows for secondary liability.

What Are the Facts?

Plaintiff, Petroliam Nasional Berhad (aka “Petronas”) is a Malaysian government-owned entity. Petronas holds the American trademark “PETRONAS.” The entity also owns the Petronas Towers in Malaysia. Defendant, Godaddy.com, is the world’s largest domain name registrar. The case revolves around a third party who registered the domain names petronastower.net and petronastowers.net in 2003. In 2007, the party began using Godaddy’s domain forwarding services to direct the domain names to an adult website. Petronas sued Godaddy for cybersquatting and contributory cybersquatting. In general, cybersquatting is the act of holding a trademark hostage in the form of a domain name and forcing the trademark owner to negotiate an unreasonable price for the domain. Although Godaddy did investigate the alleged cybersquatting, ultimately, they did not take any action.

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A celebrity’s image is the most vital marketable quality in the business of entertainment. Indeed, this image, like other forms of intellectual property, is very much the product that a famous personality offers into the economy for a profit. However, while other forms of intellectual property enjoy protection under copyright and trademark laws, an image is vulnerable to all sorts of cyber attacks that can cause severe and irreparable damage. Nonetheless, a celebrity can prepare and prevent cyberspace threats by speaking with an attorney to establish a plan to monitor online activity and prevent harm. Furthermore, acting immediately at the first sign of an attack can prevent on-going and permanent harm to reputation.

What is the Threat to Celebrities In Cyberspace?

Since a famous personality’s name, image, and reputation make up the underlying fame and fortune, any attack can harm the ability to work successfully. However, taking steps to secure a reputation is especially difficult in the case of public figures. For example, First Amendment free speech protections allow for public discussions involving public figures. Accordingly, it can be even more difficult to bring defamation claims where the victim of offensive remarks is in the public eye. Unfortunately, this harmful publicity can limit a celebrity’s capacity to secure future employment. Musicians face the added threat of the unauthorized use of their work product, especially over the Internet. While some use, even though it is unauthorized, provides free publicity over the Internet, this use can prove to be harmful to economic viability. Also, leaking new music allows users to learn about an artist’s new work, but it takes away from the artist’s ability to make a profit.

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A business’s trade secrets are an essential component of its foundation, growth, and development. A trade secret is any sort of confidential and proprietary information that a company seeks to protect from unauthorized access.  For example, a trade secret, includes a formula, pattern, compilation, program, device, method, technique, or process (e.g., computer algorithm).  By definition, a trade secret is only valuable so long as it remains a secret.   In recent years, as businesses conduct more transactions over cyberspace, there is a higher probability of trade secret theft or loss. However, the constantly changing nature of cyberspace, and the anonymity users enjoy over the Internet, make protecting trade secrets a complex issue.

What is the Threat to Trade Secrets in Cyberspace?

Trade secrets in cyberspace, which involve software and digital information, can be misappropriated or wrongfully taken and used without detection.  It is also known as “cybertheft.”  For example, an online user has the capacity to view and distribute trade secrets without detection within minutes.   Online message boards allow users to post trade secrets over the web anonymously.  By concealing their identity, it is possible to steal a trade secret without detection.  Indeed, the courts continue to issue decisions that recognize individual privacy rights in digital trade secret misappropriation cases, preventing the trade secret owner from seeking legal remedies. Furthermore, in the past, trade secret theft was intended to secure an economic advantage between competing companies. However, recent cases, such as Ford Motor Co. v. Lane, illustrate that trade secrets are vulnerable to dissatisfied employees who distribute trade secrets only to harm an employer.  On a side note, hackers may even steal and distribute trade secrets simply to show off their technical skills.

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A federal court recently issued a decision establishing that “abstract ideas” do not enjoy patent protection. In Accenture Global Services, et al. v. Guidewire Software, Inc. the United States District Court for District of Delaware found that a patent for computer software for insurance-related businesses was invalid. Therefore, Accenture did not enjoy exclusive patent-holder rights for the software. Do you own patents that relate to the software industry? Are you looking to secure and protect your exclusive patents rights for an invention? At the Law Offices of Salar Atrizadeh, an attorney with experience and knowledge in the changing field of patent law can help explain the latest developments in this area to protect your intellectual property interests.

What Is Patent Law?

According to Article I, Section 8 of the United States Constitution, Congress has the power to regulate “science and useful arts” by granting exclusive rights for such inventions and creations. Under this constitutional authority, Congress enacted Title 35 of the United States Code as the federal body relating to patents. A “patent” is a set of exclusive rights granted by the United States Patent and Trademark Office to an inventor for a limited period of time. In return, the inventor makes the underlying patented invention available to the public, which promotes intellectual growth and new developments.

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Patent law reform has recently moved to the forefront of the federal legislation calendar as the country calls on Congress to protect inventors and consumers from intellectual property trolls (“IP trolls”). IP trolls may also be known as patent assertion entities. These IP trolls include individuals or entities that do not necessarily generate innovations themselves, but rather buy and hold patents, copyrights, or trademarks. Then, the IP trolls instigate infringement litigation against parties who use the otherwise idle intellectual property. Are you in litigation against an IP troll for alleged infringement? Do you have a non-active patent that may interest IP trolls? At the Law Offices of Salar Atrizadeh, an attorney with experience and knowledge in intellectual property law and infringement litigation can help you understand your legal rights and remedies.

What Are the Negative Effects of Intellectual Property Trolls?

IP trolls target idle intellectual property and file lawsuits, which the majority of consumers find to be frivolous and unjustified (i.e. lacking any merit or good-faith cause to sue). Recently, President Obama signed the America Invents Act (“AIA”) into law in an effort to protect against such frivolous litigation. The AIA is the first attempt by the federal government to curtail intellectual property claims by such IP trolls. For example, the AIA requires that IP trolls file individual actions for infringement, rather than a single action against multiple defendants. This requirement will substantially increase the cost of litigation for IP trolls, and, perhaps hinder them entirely. Indeed, some cases may reach extremely high litigation costs. For example, MPHJ Technology Investments, LLC, a Texas-based patent-licensing company, recently sued consumers for scanning any document to send by email. MPHJ sent consumers letters demanding $1,200 to cover the cost of wrongfully scanning documents, which they claim to be a patented process calling for royalties (i.e., payments to the patent holder for using the patented technology). Otherwise, MPHJ threatened the consumers with litigation. A complaint filed in a Vermont state court aims to protect consumers from such patent troll litigation in the first lawsuit of this kind.

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The U.S. Copyright Act, codified under 17 U.S.C. § 101 et seq., protects copyrighted works from infringement from wrongful users. This federal law aims to protect unique works while still allowing for creativity and future creations. To that end, individuals charged with copyright infringement can avoid liability entirely under a valid fair use defense. The fair use exception, which is codified under 17 U.S.C. § 107, provides that instances of work that fall within this exception do not constitute infringement.

How Do Courts Apply the Fair Use Exception?

Since courts have not adopted a test or set of factors to determine when the fair use defense applies, judges will look to the totality of circumstances on a case-by-case basis to determine whether the defense is appropriate. This exception allows the courts to avoid applying the statute so strictly that it prevents creativity. In Religious Technology Center v. Netcom On-Line Communication Services, Inc., the United States District Court for the Northern District of California found the fair use exception applies when a work is used for “criticism, comment, news reporting, teaching, scholarship or research.” Under the fair use exception, courts must consider the following factors: (1) purpose and character of the use; (2) nature of the work; (3) amount of the work used in comparison to the entire work; and (4) effect of the use on the potential value of the work. However, this is not a total list of considerations and courts will often look to any unique factors that affect the outcome of the case.

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Copyright protection is commonly known to apply to inventions and artwork to protect original work from copyright infringement. However, copyright protections also extend to websites. Today, the Internet, and especially personal websites extend to all avenues of the marketplace. Individuals have blogs, businesses have websites to advertise and inform about their services, and professionals maintain websites with personal information and updates in their field of work. All of this content is subject to copyright protection and copyright infringement.

Why is it Appropriate to Copyright a Website?

Anytime a website contains unique and original content, it is subject to copyright infringement. Therefore, anytime a website owner is looking to protect the text, sound, or design contained on a website, it is appropriate to copyright the website. Website owners may also have the option to copyright portions of a website, specifically the portions of the website that are original rather than a template. Often several different parties will contribute to a website by working on different aspects. Therefore, to ease the copyright process, it is often helpful to determine authorship and ownership before creating the website. For instance, a developer may own the code for the site, a designer may own the graphical and creative aspects of the site, and the owner of the site may own the content or material. Establishing ownership will make it easier to copyright the different portions of the website.

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